What is Fixed Supply (Price Elasticity)?

Fixed supply means that the supply, or total quantity of an asset, is constant and does not change. When an asset has a fixed supply — like the fixed supply of 21 million bitcoin (BTC), for example — then the primary factor involved in its price fluctuations is demand. The supply of an asset is related to the price elasticity of an asset, or the responsiveness of the amount of goods or services needed to change its price. When an asset has a fixed supply, then the elasticity of an asset is said to be zero.